February 2017

03Feb

Pension Coverage in Kenya: Legal and Policy Framework Required to Enhance Pension Coverage in Kenya

By Nyakundi B. D. Kenya's pension system is fragmented and covers only 15% of the labor force. The enactment of the Retirement Benefits Act in 1997 has not in any significant way impacted on the widening coverage of the pension system. The problem of low coverage is attributable to lack of an effective policy aimed at widening of coverage and the current legal framework which was designed to target participation of formal workers. This paper argues that wide ranging policy...

February 3, 2017
Articles, Labor Market, Regulation,
Read more...
03Feb

Investment Consultants and Institutional Corruption

By Jay Youngdahl Analyses of the financial crisis of 2007-2009 and the continuing effects of a difficult investing environment have largely focused on factors such as the roles of failed and complex financial products, inadequate credit rating agencies, and ineffective government regulators. Nearly unexamined, however, is a key group of actors in the financial landscape, investment consultants. Investment consultants stand as gatekeepers between large investors, such as private and public retirement funds, and those from “Wall Street” who design and...

February 3, 2017
Articles, Corporate Governance, Investing, Regulation,
Read more...
03Feb

The Effects of Non-Contributory Pensions on Material and Subjective Well Being

By Rosangela Bando, Sebastian Galiani & Paul Gertler Public expenditures on non-contributory pensions are equivalent to at least 1 percent of GDP in several countries in Latin America and is expected to increase. We explore the effect of non-contributory pensions on the well-being of the beneficiary population by studying the Pension 65 program in Peru, which uses a poverty eligibility threshold. We find that the program reduced the average score of beneficiaries on the Geriatric Depression Scale by nine percent...

February 3, 2017
Articles, Pension design
Read more...
03Feb

Austerity, ageing and the financialisation of pensions policy in the UK

By Craig Berry This article offers a detailed analysis of the recent history of pensions policy in the United Kingdom, culminating in two apparent `revolutions' in policy now underway: the introduction of `automatic enrolment' into private pensions, and proposals for a new `single-tier' state pension. These reforms are considered exemplary of the `financialisation' of UK welfare provision -- typified in pensions policy by the notion that individuals must take personal responsibility for their own long-term financial security, and engage intimately...

February 3, 2017
Articles, Pension design, Regulation, System Sustainability,
Read more...
03Feb

The commitment value of funding pensions

By Jean Denis Garon This paper studies how funding public pensions can improve policy outcomes when short-sighted governments cannot commit. We focus on sustainable plans, where optimal nonlinear pensions are not reneged on by sequential governments. Funding pensions is a commitment mechanism. It implies lower contributions than does the second best policy, which reduces temptation to over-redistribute later and to misuse revealed private information. Funding may be preferable even if the population growth rate is higher than the rate of...

February 3, 2017
Articles, Corporate Governance, Regulation, ,
Read more...
03Feb

Shrouded costs of government: The political economy of state and local public pensions

By Edward L. Glaeser, Giacomo A M Ponzetto Why do public-sector workers receive so much of their compensation in the form of pensions and other benefits? This paper presents a political economy model in which politicians compete for taxpayers' and government employees' votes by promising compensation packages, but some voters cannot evaluate every aspect of promised compensation. If pension packages are "shrouded," so that public-sector workers better understand their value than ordinary taxpayers, then compensation will be highly back-loaded. In...

February 3, 2017
Adequacy, Regulation, System Sustainability,
Read more...
03Feb

Pension Risk and Risk Based Supervision in Defined Contribution Pension Funds

By Rodolph Heinz and Randle Tony The main goal of any pension system is to ensure that members receive an adequate pension income when they retire. Whilst traditional defined benefit (DB) pension plans set out what that pension income will be in advance and then strive to deliver it, the growing number of defined contribution (DC) plans accumulates a sum of assets which can then be turned into a pension income on retirement. However, the amount of this retirement income...

February 3, 2017
Investing, Regulation
Read more...
03Feb

Constitutional Reform and Universal Pension Law

By Noemí Monroy Enriquez En México, en los próximos años, la tendencia demográfica se caracterizará por el incremento de la población adulta de 65 años o más, la cual, en su mayoría, no cuenta con algún ingreso para su subsistencia. El fenómeno del incremento de la población de edad avanzada no solamente es nacional; de acuerdo con el informe de Naciones Unidas, el crecimiento de la población adulta de 60 años y más se ha acelerado, lo que genera todo...

February 3, 2017
Adequacy, Regulation
Read more...
03Feb

Saving and taxation in a voluntary pension system : toward an agent-based model

By Balázs Király Mandatory pension systems only partially replace old-age income, therefore the government also operates a voluntary pension system, where savings are matched by government grants. Accounting for the resulting tax expenditure, our models describe the income flow from shortsighted to farsighted workers. 1. In rational models, explicit results are obtained, showing the limited learning of shortsighted workers. 2. In agent-based models, this learning is improved and this raises the shortsighted workers' saving and reduces perverse income redistribution. (more…)

February 3, 2017
Savings, System Sustainability, , ,
Read more...